Leading the B2B frontier: People fueling profitability

Rupali:

Hello, everyone. I’m Rupali and this is Matrix Moments People First, a conversational series where we talk to remarkable founders, entrepreneurs and leaders on how they build successful ventures by building amazing teams around them. Today I have a very special guest, special for more than one reason. Asish Mohapatra, cofounder and CEO of OfBusiness and cofounder of Oxyzo.

Asish, you know I’ve been waiting to do this for a while, so can't be thankful enough. You know, you’ve been connected with the Matrix ecosystem for a while, I think my biggest miss that I’ve never got to work with you in Matrix. But I’m glad Matrix allowed me to know you better, right, so thank you so much.

Asish:

Thank you so much, thank you for having looked forward to a good conversation.

Rupali:

I’m definitely very excited and I’m sure I’m looking forward to knowing all the secrets. I know you’ve spoken a lot but today we’re going to focus more around your org building stories and hoping that a lot of entrepreneurs can learn from someone who’s --

Asish:

Something very close to my heart.

Rupali:

Perfect. I think everybody knows the background that you come from, consultant, ex VC where we’ve seen --

Asish:

Operations before that.

Rupali:

Yes. But you’ve been a consultant, operator, a VC, but when you started OfBusiness while you had and have an amazing cofounding team you were a set of first time founders. But still when you look back it looks like you’ve done everything right.

Asish:

We’re good sales guys, we project it that way.

Rupali:

It looks right. I’m sure you had some framework in your mind while you have a vision to how to scale a business I’m sure there was a vision around how to build an org who can take this vision forward. What was that playbook that you guys started with?

Asish:

So my playbook was fairly straightforward, what I had seen at work in most successful companies not just startups but any kind of successful organizations was very simple that pretty much the founding team has to have some common values and those are pretty much necessities and you can't really compromise on them. And on top of that you actually have one or maybe two skills in each individual that the other can't replicate so hence you inherently have trust because they have these common values but you also have respect which actually emanates from the fact that they do something that you would --

Rupali:

Complementary.

Asish:

Yeah, complementary. So the common values that we had and we still imbibe are, one, you have to be very hands on, each one of us does our own work. No secretary, no driver, we pretty much do our own work, I mean no juniors, no handymen, no factotums so on. Two, very commercial, so you’d have the think profitability first. And third, you have think company first. So you have to give your life to the company first and then think about yourself, so those are common values.

But if you look at people who were in our founding team somebody was very good or very high on energy, Nitin Jain. Somebody who was very good in detail and thinking about gelling everybody together, Ruchi Kalra and stuff like that. So I guess that's how we chose our team.

Rupali:

Wonderful. But, well, we have access to -- seen your journey and we know, right, for our viewers, Asish, who love to know the scale you guys operated from a size perspective where there are fast forward you guys started eight years back, fast forward to now, almost eight years, right?

Asish:

Seven years.

Rupali:

Seven years. You have two profitable unicorns, right, so would love to know the kind of scale you guys have built in terms of what is the team size, how big is OFB?

Asish:

Yeah. So OFB today has close to about 650 people and last year it did a -- for the full fiscal it did a revenue of close to about 16,000 crores and a profit of close to 500 crores, profit after tax, 500 crores. If you look at Oxyzo, Oxyzo has about 400 odd people and last year it built an AUM which is actually fixed the management close to 4830 crores and a profit after tax of close to 200 crores. So our team is about 1100, we’ve kind of taken about my sense is about 300 a year.

Rupali:

New people?

Asish:

New people. So on an average about 25 people joined so I think we lose about one or two every month and about 27-28 is what the intake is. And I think we’ve added 300 for the last three years so three years back we were just 200 people.

Rupali:

But it’s a very highly integrated both team.

Asish:

Very much. So I think one of the things that we pride ourselves on and we’ve learnt that with time passing by that smaller teams especially when they’re well-knit they actually deliver more value. Just the sheer count of having a lot more people doesn’t really help. So if each one of us can give 20 percent more and that too efficiently it’s probably a better outcome for the organization on cost as well as on efficiency rather than just having more number of people.

Rupali:

Yeah. And that takes me into the fact because you said there needs to be an arbitrage that you can build up from work perspective. You guys also adopted very consciously a method of building inhouse talent which is not easily seen in early stage. Generally because you need [0:06:27] [Inaudible] solutions, you need people who can come and do. Because build as everybody knows takes time, effort and lot of time invested. So why and I know now that you guys have this amazing engine running which works beautifully for both the organizations, so what was that playbook?

Asish:

I think to be very honest with you there was always this penchant or the lucre of actually taking somebody who was senior but they were expensive and we wanted to make money. So we could have got them in earlier, maybe they would have delivered more than what we all did but I think it would have just cost a lot. And first we wanted to make money, second is I think as individuals who are very hands on it’s very difficult to coexist with people who are very senior and are very learned.

For example I think I will gel very well with an unskilled labor or somebody who’s just fresh out of college than somebody who is like 20 years from the industry because he’d come and tell me his stories, I would rather tell my stories to him.

Rupali:

But how do you solve for functional depth?

Asish:

Functional depth I think it’s a myth, people pick it up with time. People pick it up with action, people pick it up with empowerment. So if you have a young guy who has all the energy, is ready to throw in all the energy with all the hunger and deep down at the end of the pool he’ll probably pick it up, that's the sense I had. I mean to be honest with you I think that's something that I picked up from previous organizations that I had worked with so whether it is McKinsey, whether it is ITC I had seen that at work. For example I was a maintenance engineer in my first job, I knew nothing about those machines that I was trying to maintain, within a month I kind of figured it out. So, yeah.

Rupali:

But, Asish, if we see you guys have grown super-fast, 0-1, 1-10, 10-100 and I love to say that there is an IPO around the corner.

Asish:

Yes, about a year down the line.

Rupali:

So the business has grown to a different scale of growth. But are there some behavioral nonnegotiable that you still see because I’m sure when you build that core team you look at certain things. But I also know that when you go through a scale not everybody will evangelize the vision the way your core team might have done. But how do you still ensure the DNA stage how do you ensure it now that you know --

Asish:

Yeah. That's the key to actually building an organization. You can have your set of values, they can be different from each other but how do you really stay core to it is the key. I think couple of things that we have done right and I’ll tell you also what we’ve done wrong. I think two things that we’ve done right, one is we’ve kind of reiterated the same set of values by doing it ourselves.

Rupali:

Okay, yeah, leading by example.

Asish:

Leading by example. There is no going away from it, if you don’t lead by example if you have any other [0:09:20] [Inaudible].

Rupali:

Give me an example?

Asish:

So for example if we say company first like for example if there is a meeting to be done and let’s say your junior is not there because he’s into something else so he’s not well or whatever I think the senior always steps in to actually go into the meeting rather than asking a parallel guy or a junior guy to go. So that's the culture in our company, if the junior can't do it then the senior will do it. So it forces everybody to be hands on.

Rupali:

Yeah.

Asish:

So that's one. I think second is when it comes to for example even itsy bitsy tiny things, for example if somebody is traveling and there is a cost to be incurred on behalf of the company the person will pay it without even thinking twice whether he will get reimbursed or not. He’ll probably get reimbursed anyways but he will always spend that money personally first. So those are the kind of things, these are small things and we all practice that ourselves so that kind of is true.

Rupali:

So tell me some of the mistakes you have made because you guys make it look so simple.

Asish:

We’re good salesmen.

Rupali:

Yeah, when I say you the entire set of team, all of you, you make it sound very easy, very seamless, but I’m sure there were innumerable mistakes. So what would some of those be especially around culture, people heading --?

Asish:

Specifically around culture I think we were very poor at integrating people who were senior and from the outside that I think hence we have lost out in terms of learning in specific areas because I think because we’re so young as a team, the median age in the company is probably between 25-26, what happens is that somebody who is very senior finds it very tough to gel and once they’ve come in and we’ve tried a few once they come in we’ve not been able to really create that conducive environment. Certain functions have done it well but more general functions like sales, marketing, operations, underwriting and stuff like that have not really done it.

So hence we probably lost out on and we always made mistakes that I’m always [0:11:15] [Inaudible] that's been the business outcome, so I would say that's number one. Number two on my list on the people front is that we were very late to create people management systems or performance management systems. You know, it was so much like a family, so much like an extension of college that we kind of never maybe hired --

Rupali:

Institutionalized.

Asish:

We never really institutionalized input so everybody was measured by output, how much revenue you brought for the company and how much cost did you cut down and stuff like that. There were people putting in a lot of effort but not much was coming out of it because of the circumstances that they were in. Those are the kind of people who kind of because we did not put PMS system --

Rupali:

And they didn’t get benefited by it.

Asish:

But I think looking back I would first correct the later and then the former.

Rupali:

Got it. But tell me what are your nonnegotiables when you hire someone?

Asish:

Nonnegotiables, first is the fact that the person has to always aim to do the right thing not the fast thing or not the quick thing or not the most in thing.

Rupali:

But how will you measure that?

Asish:

That's very simple. If you talk to somebody and you’ve been looking at it for like let’s say 10-15 years you’ll get to know, it’s very intuitive. But there are some things like for example if you ask him how when he’s been in a tradeoff, in a business tradeoff, what kind of decisions he makes, what takes him to those kind of decisions. So that's one in the conversation itself but second is more importantly blind reference checks. If you do a lot of reference checks you will realize whether the person is or takes time to do the right thing. We would always take the guy who would take time to do the right thing because we have enough people who will do. Right, so I stand a living example of it.

So that's one nonnegotiable. I think the second nonnegotiable is just working hard. I think India as a country if somebody is not ready to put in everything, I don’t want to mention hours. So India as a country needs somebody to really go out of their comfort zone whatever those hours are and really stretch, that's a nonnegotiable. I think the third thing for us is a very important part of the business that we’re in which is a commercial mindset. The art of making money, the want to make money is something that we look for.

I think people who are from business families have it to an extent but we’ve seen that people who had business exposure but not necessarily from business families are even better the ones than who are from business families. So those are pretty much the three things that we today look for. It has evolved with time, today I think these are the three. I think earlier probably there were a set of different three.

Rupali:

Asish, I’m going to ask you to tell us more about the MT program that you run.

Asish:

Right, something very close to my heart. Yes.

Rupali:

A lot of our founders have asked me, and would love to know how Asish and team does it. And it’s like an inhouse IP that you’ve created. So tell us more about all of these?

Asish:

So it starts off with the belief, Rupali, that young people will be better off in the company than some of the older guys. I think the belief is crucial because that belief brings you to investing in young talent because fundamentally they won't deliver for the first couple of years. I think the third year onwards is when you really start seeing output from them, it will be really out of the park in the fifth year. So first of all you have to have that belief, you don’t need to really measure them for the first couple of years at least when you're starting off the program. So, one is that.

Two is I think to be very concentrated in a few colleges; you can't be going to Tom, Dick and Harry all the time.

Rupali:

Which are the colleges you pick?

Asish:

So we kind of zeroed down on saying that we will not take the top tiers, first of all we’ll only go to B-schools not to the engineering grads because if the engineering grads join in then they will fly off to B-schools after some time. We want people to join to retire. So even in B-schools we took the next rung not the really top rung because the top rung is really hungry, he’s always mobile.

Rupali:

But may I ask why because you were in IIT?

Asish:

That is why I hate IITs, so you know what, if I’m from an IIT or if somebody is from an IIM or an ISB he is always looking for his next greener pasture.

Rupali:

They’re more mercenary?

Asish:

More mercenary, I mean I don’t want to say it but --

Rupali:

But is it bad?

Asish:

It’s not bad but --

Rupali:

But not for what you're trying to solve. You want people who’ll stay.

Asish:

Exactly. Yeah, I believe that if people join to retire, if they can compound in a particular role within a certain company they will actually clearly hit it out of the park after like 3-4 years. But nobody is ready to give him those 3-4 years. So we kind of zeroed down on saying that hey, if we go to the tier 2 colleges then probably the best ones from there are the ones who has really put in a lot of effort and those are the ones who will actually have a little more patience.

So we go to like say the second tier IIMs, Kashipur, Trichy, Udaipur, Rohtak, IIFT, FMS, not really second tier but still not really ABCL, right. So we go there and a few other colleges which are a little less next rung and so second is to be targeted, we go there every single year.

The third thing that we do there is we do a lot of campus activation, for example day after tomorrow I’m the lead speaker in their campus induction program in IIM Kashipur. So you have to invest prior, the campus has to know you.

Rupali:

So that they know what you guys do.

Asish:

Yes, and senior management does it, it’s not like left to the most recent batch.

Rupali:

Ah, very nice.

Asish:

The third thing that we do is that when these guys come in that's when the proof of the pudding comes by, you actually give them something and should be quickly ready to change if it’s not working for them. So you should always give them a second chance because likely when you're throwing them at the deep end of the pool you’ll get it wrong most likely the first time around. And you can't judge him by the fact that he actually failed in the first vocation that you gave him. So quickly change, if it’s in sales didn’t do well give him ops, if he’s in ops didn’t do well give him sales or finance.

Rupali:

But somebody has to process manage this end to end.

Asish:

Yes. So what we’ve been blessed with is a team that has been at it for the last seven years, we’re seven years old, and somebody has been leading it from the HR team right for the entire seven years. So that amount of solidarity is also very important because otherwise campus handovers are very, very tricky.

Rupali:

And how big is this batch usually?

Asish:

Last year it was 107, for the first year it was just 3 people, so from 3 we’ve now gone to 107.

Rupali:

And a lot of your leadership is from your first, second batches, that is what I know?

Asish:

Yes, that's right. In fact I would say that if you take the senior management team which is close to what 30 odd people my sense is about 20 would be from freshmen or 0-1 batches. Because what happens is once you start taking these people from the campus as freshmen within 6-9 months they would get their friends as well who are probably working elsewhere and not really so happy. So it kind of builds that ecosystem which you can always dip into.

Rupali:

And a lot of use cases now for others to refer to, right?

Asish:

But it has its pitfalls. The real big pitfall is that you have to be very patient in the first two years. It will not give you any output in the first two years. So what does it need you to do, in the first two years the guys who are actually at the top have to go down and work on behalf of those guys so that they can, one, learn and also substitute for the work that you expect out of them. So I think that is a big deal.

Rupali:

But the flywheel comes into place after a while.

Asish:

After 3 years, I say 3-4 years.

Rupali:

But huge ROI after that.

Asish:

Huge ROI after that. And I think the other thing, Rupali, that we’ve done right also learnt over a period of time not doing it right in the beginning but then we’ve kind of zeroed down saying that hey, this is very important, is that you have whatever promises you make on campus you have to keep them. Like for example if you go to campus and say that, hey, you’ll be a PNL lead in a 3 year timeframe there have to be people from the same campus who’ve done that, who’ve been there and stuff like that. So living up to the promise is something which is very important.

And frankly it’s not like we’ve always been successful at that. I think in our initial 2 or 3 batches we were really successful and then we had a 2-3 year hiatus where we didn’t see any success and then now then we’ve completely refreshed back into motion again.

Rupali:

But assuming you’ve given them chance, sales [0:05:36] [Hindi Spoken] I’m assuming after all these cycles there would still be cases where it doesn’t work out?

Asish:

Oh, yeah, typically retention in a batch my sense is between 60-70 percent after a year but that 60-70 percent after a year turns out to be 60-70 percent even after 2 years. So the guys who last a year --

Rupali:

The stickiness is very high after that?

Asish:

Yes, not only the stickiness from our side is very high but also from their side they do very well. So they also gain from the fact that they’ve been around for a year.

Rupali:

Got it. Very interesting. You should come up with this playbook and we just then --

Asish:

It’s a simple one, it just needs patience.

Rupali:

I think that's what startups lack, that initial timing.

Asish:

Because they just want results very, very quickly. We were on the wrong side of 30 or the right side of 30 when we started.

Rupali:

And that's where the solution looks very unbecoming on the stage because I’m thinking at that stage you guys needed fast solution for it still you guys invested in this.

Asish:

But to be honest with you, Rupali, at that time we didn’t have an option also. The necessity came from the fact that most of our business actually happens in tier 2 locations. And if you really take people who are from the industry they would like to be in metros, they would like to be in their hometowns, they like to be where they’re already rooted because they would have children and stuff like that. So it was more necessity.

Rupali:

And more options for opportunities and stuff.

Asish:

Yes.

Rupali:

Understood. Sir, I have a couple of rapid fires for you, what’s your management style?

Asish:

Leading by example.

Rupali:

Okay. Let go or level up?

Asish:

Let go.

Rupali:

And are you okay to have some of these conversations directly, how do you do it?

Asish:

Oh, yeah, always.

Rupali:

So do you take the Band-Aid off in one shot or --?

Asish:

Yeah, yeah, one shot always.

Rupali:

Deal breaker question that you ask in any interview?

Asish:

Deal breaker question that I ask is what can you give to the company right now and most people come up with all kinds of stuff. It ranges from saying that I’ll give all the money that I have in my pocket right now knowing that we’re commercial in outlook to --

Rupali:

And is it the right answer?

Asish:

It’s the passion that says that, because the moment he says that I’ll give you all the money in my pocket I say yeah, do it.

Rupali:

Seriously?

Asish:

Some people have actually laid it on the table. Two, saying that I’ll get my cousins, my uncles to also work for you for free, I’ve heard that as well. This one I really like, the first time I heard it I told him that hey, tell your friends as well, this is a good answer.

Rupali:

Very nice. High on skill but low on intent but low on skill but very high on intent and energy, which one you’ll pick?

Asish:

Neither. Because if you're making that trade off you're not a good recruiter. You have to find out at least somebody who’s average on both because anything --

Rupali:

So that you can work on one.

Asish:

So that you can work on one. Right, if one is so dinged on one you just can't get him up anyway.

Rupali:

So I have one question that you and I have discussed for a while, this is my last question I promise, Asish, I remember when my first few years in Matrix I was in awe with what you’d write. Your Sunday afternoon content in itself can be --

Asish:

Sunday morning.

Rupali:

You did write it and maybe I read it around afternoon time. But it’s like religiously you write to the T every Sunday, it can be a master class in itself. It also gives people a chance to not only understand about the business you're building but also sneak peek into the culture that you have. And you’ve also guided me many times when I said how do you do it, and I want to write and I’m skeptical and I remember you telling me [0:09:34] [Hindi Spoken] just put it down there. But now because you are also a founder, you represent, you're like the face of business, right, do you believe a company benefits when a founder has a larger than life personality or is vocal about his or her perspective on social media because it can backfire also too many a time.

Asish:

Yeah, yeah, it can backfire but my strong belief is that not just the founder but almost everybody associated with the company needs to have a larger than life persona because frankly at the early stage of the company the company’s image is a summation of everybody who’s [0:10:15] [Inaudible]. And whatever little you can do assuming that you do it well can only add to the image of the company because -- I’ll give you some examples.

I think true to us, also true to everyone else if a company posts an article and if you compare that with a founder who posts the same article I think the viewers are almost 10x-20x.

Rupali:

Totally. Yeah.

Asish:

So you have more readership that way. Also more importantly what happens is people connect more with individuals and hence whatever the individual writes they kind of at the backend connect to the company as well and that's marketing for free. So if the company does it I think the social media sites will also chase them more for money but if the individual does it they will think that he’s doing it for free.

Rupali:

And I think also it helps you attract the right kind of people for different reasons, maybe if somebody has a --

Asish:

That's why we started, I mean it was a free recruitment tool. Because I remember we thinking about it in the initial days as to whether we should use a recruiter either inhouse or outside and then we realized that costs. So why don’t we just start writing and in every article we end up with saying that this is how it happens at OfBusiness and people will just send their resumes. And it actually happened that way so it was a free recruitment.

Rupali:

I did tell to all our new founders that they should because I do believe, Asish, that you can't outsource that, somebody a recruiter or anybody else can do it for you to some extent but I think nobody else can represent your firm better than you out there in all earnestness.

Asish:

Yeah, but I think as you grow, Rupali, it is more important that everybody else in the company picks up the gesture. Like for example if you look at us I’ve been pushing everyone for like close to 3-4 years now there are active probably 3-4 other writers as well. It takes a long time for somebody to make that jump but once they’ve made that jump they stay there. So it has to be a group of people, it can't be just the founder.

Rupali:

No, you’ve done, you’ve converted me for sure.

Asish:

Somebody outside the company.

Rupali:

Yeah, outside the company. Right, I remember my first conversation with you was around this. My last question again, sorry, a lot of last questions. What is an ooh-la-la company?

Asish:

So to be very honest with you I have always been a big proponent of making money and I was a big proponent of making money even when it was not the fad around, today it’s the fad, everybody wants to make money. So people used to call me a-la-la and used to say that OfBusiness is like a la-la company so somebody wrote a pretty long article about it and I’m pretty sure I almost read it.

And then I thought what is the right way to respond to it and I got like close to hundreds of messages, just LinkedIn saying that hey, we’re waiting for your response, why don’t you respond. So I came up with this concept of saying that hey, we at la-la but the reality is over a period of time we’ve grown so much over the last seven years that we’ve added ooh to it so we’re la-la but we’ve added ooh, so we’re ooh-la-la.

Rupali:

And ooh is? La-la I know.

Asish:

Just it’s ooh-la-la, ooh-la-la at Too hai meri fantasy. So we’re everybody’s fantasy right now but still two thirds a la-la because four out of six words of ooh-la-la is still a la-la. So that was the concept.

Rupali:

No, but I must confess. So what an elegant response. I think apart from that response bit I think that's somewhere around everybody expected you to do it because you're active and we thought you’ll – but you know what stood to me is how your team rallied towards it. The entire OFB ecosystem, Oxyzo ecosystem sharing, commenting, was ---

Asish:

It stuck actually, we made a few posters around it as well.

Rupali:

Oh, it did, it did. And I could – and I think going through the comments it was amazing to understand because these were your employees telling and sharing.

Asish:

A lot of them were ex-employees as well.

Rupali:

Is it? Amazing. That was great and I hear you’re doing an article so waiting for that. This has been amazing, Asish, thank you so much for sharing your journey. I think I’ve been always a big fan of even you join Matrix you hear stories. Any place you join you hear stories of once upon a time, you definitely are the once upon a time stories that we still hear but I think being part of Matrix has allowed me to know you, learn from you, so very excited and I’m hoping this experience would be a lot of new founders can learn from it. So thank you and looking forward to where the ooh-la-la company goes to the next level.

Asish:

Thank you so much, thank you for the kind words and good luck with the show going ahead.

Rupali:

Thank you. Looking forward.